A study on a measurement of individual risk attitudes using the ahp method with consideration of assets portfolio

Abstract

It is very important to measure risk attitudes accurately because it exercises a great deal of influence on the matter of choice for seeking profits. However, the lottery game, which has commonly been used for measuring risk attitudes, has been regarded as too simplified and artificial a method for proper measurement. In this paper, we suggest a new method of measurement for risk attitudes, that is, the application of the AHP method to overcome the limits of the existing lottery game method. There is a survey of the decision maker’s view of stability and profitability for asset portfolio by use of the AHP method, and then a measurement of his/her risk attitude by applying the survey results to his/her current status of asset portfolio. A comparative analysis will be shown between the measured risk attitudes by the AHP method and the lottery game method. © 2015, ICIC Express Letters Office. All rights reserved.